Source: Yue Xiaoyu

Pumpfun is a meme currency issuance and trading platform on the Solana chain, focusing on fair issuance.

Pumpfun was launched in January 2024. After its launch, it quickly became popular in the community and caught up with the meme currency craze. In other words, it directly promoted the meme currency craze into a new stage.

Pumpfun’s data can be said to be very eye-catching. It has accumulated more than 200 million U.S. dollars in revenue. During some peak periods, Pump.fun’s daily revenue can reach millions of U.S. dollars, once surpassing Uniswap Labs. , becoming the fourth largest protocol among all blockchain networks.

If meme currency speculation is like gambling, then pump is the most profitable casino. It is better to open a casino than to participate in gambling.

Pump is a phenomenal product in this cycle, so it is very straightforward to research and learn.

Pump’s team didn’t actually start out as a launchpad. It initially started out as an NFT marketplace, but after several attempts it turned to its current direction.

pump is a European team. The founding members are all young. Their CTO did not even go to college. His highest education level is in middle school, but he is very skilled. Their youth and technical prowess allow them to see problems differently and have sharp intuition about products.

Therefore, the key to the success of the pump project lies in the youth and innovative ability of their team. In fact, many people have thought about this idea, but only the PUMPFUN team can actually make it happen.

The road to success is not crowded, because most people cannot persist.

When you have an idea, there may be a thousand people in the world who have already had the idea, but only a hundred people can turn the idea into action and actually put it into practice. Continue to do it and solve it. Only a few people face difficulty one after another.

Not only in Web3, but also in the Web2 industry and in the development process of various industries, there are already many, many such cases.

Pump focuses on fair distribution. There is no pre-sale and no team allocation. So how does it achieve it?

An automated market maker (AMM) like a decentralized exchange (DEX) also needs to create a liquidity pool and inject initial liquidity, but the bonding curve pricing model used by Pump.fun ( Bonding Curve), directly using function curves to realize price changes.

To put it simply, in the bonding curve pricing model, there is a positive exponential rising relationship between the token price and the number of tokens. The higher the price, the greater the number of tokens released.

That is to say, the token will be based onPurchases gradually enter circulation. As users purchase tokens, they are “minted” or “released.”

The bonding curve function will make the price increase faster as the supply of tokens increases.

This is because when you buy in the early stage, the price of the token does not rise very fast, but the later you buy, the same amount of funds can increase the price more.

In the early purchase stage, since the number of tokens in circulation is relatively small, each purchase has a relatively small impact on the price. In other words, the price increase will not be too large.

When the number of tokens has already established a considerable base in the market, the number of tokens that can be purchased with the same amount of funds (SOL or other currencies) will decrease, but due to the characteristics of the price function, these purchases will leading to a more significant price increase.

What consequences will such functional characteristics bring?

First, early investment can be encouraged. Early buyers can acquire tokens at a lower price, and then the value of their holdings increases significantly as the price rises rapidly.

Second, late-stage investment has a leverage effect. In the later stage, the same investment amount will have a greater impact on the price due to the characteristics of the price curve. This will have a stronger incentive effect for later entrants and is more in line with the characteristics of meme coins. Unlike some large market capitalization tokens, when the funds invested in the later period are relatively small, it will not have any impact on the price, which means there is no sense of participation.

Of course, the rise in price is not unlimited. The setting of pump is: when it reaches a certain market value, a liquidity pool will be automatically built in DEX and transferred to DEX for trading.

In other words, the fundraising stage of issuing tokens on Pump uses the bonding curve function, which provides a price discovery mechanism for the early stages of tokens.

But without external intervention, prices may rise without limit due to excessive speculation. By moving to a DEX and using an AMM (Automated Market Maker), the market’s natural balancing mechanism can be introduced to avoid excessive price fluctuations.

Constructing a liquidity pool on DEX can provide a stable trading environment for tokens and alleviate the extreme price fluctuations that may be caused by a single curve model to a certain extent.

When the market value of a currency is relatively large, a trading mechanism is needed that can maintain price stability, have better market liquidity, and avoid very severe price fluctuations.

The overall process can be divided into two stages: the pre-IPO fundraising stage and the post-IPO transaction stage.

(1) Create tokens: First, users can issue tokens with one click. Users can create a token at a very low cost (0.02 SOL) without any technical background. The creation process only requires entering the token name, codename, introduction and an image.

(2) Fundraising stage: The creator attracts other users to purchase tokens. All token models on pump.fun are the same, and the total amount is constant at 10 billion, the initial circulation is 0, the initial "virtual market value" is set to 30$SOL, and tokens are released through user purchasing behavior.

(3) Reaching the listing threshold: When the market value reaches US$100,000 (priced in SOL), that is, the amount of funds raised reaches US$17,000, and the circulation of tokens at this time is 800 million, Pumpfun will then 200 million tokens were minted, combined to form trading pairs and added to the decentralized exchange Raydium. Finally, a decentralized issued Memecoin with a market value of US$69,000 and a total token volume of 1 billion was launched.

(4) Successful listing: The price of each Raydium token, which is the price at the moment of completion of fundraising, is 0.00000041 $SOL, which is 14.64 times higher than the initial virtual pool price. Throughout the process, Pumpfun will charge a 1% transaction fee during the fundraising stage, and a 6SOL listing fee when the token is listed on Raydium.

Recently, Pump’s live broadcast function has become popular. I browsed it and was really shocked. Some live-stream pornographic videos, some lock up grandma before releasing her after reaching a certain market value, and some keep squatting on the toilet to hype her up. They do everything they can.

When it comes to live streaming of currency speculation, the first thing I thought of was someone live broadcasting how to speculate in currency, but what I didn’t expect was that now it has changed. It has become a kind of abstract play to attract attention, and live broadcast to bring money like live streaming to bring goods.

Attention is a scarce resource.

Meme coins themselves are an attention-grabbing tool,

capturing people’s attention through humor and pop culture elements.

Live broadcast further amplifies this attraction through real-time interaction, making the audience more willing to participate and pay attention.

To put it simply, Meme tokens are inherently entertaining, and live broadcasts further amplify this entertainment. Users can participate in a game-like market through live broadcast, which is both entertaining and engaging.

More importantly, the model of "Meme Coin + Live Broadcasting = Attention Economy" creates a new economic model in the cryptocurrency ecosystem.

Through this combination, Meme coin creators can quickly accumulate a large amount of attention, and live broadcasts provide the opportunity to interact directly with the community, thereby converting this attention into investments and transactions in Meme coins.

Live broadcast provides opportunities for instant promotion and real-time marketing of Meme coins. Creators can communicate directly with users to share token ideas, market analysis or real-time trading activity.

Pump’s live broadcast function is not only a technical innovation, it changes the market communication method of Meme tokens, making the issuance and trading of tokens more social and entertaining.

This not only increases user stickiness, but also provides a platform for creators who want to promote Meme tokens through social media influence.

Everything has pros and cons.

In the live broadcast of the Web2 industry, various anchors are also trying various ways to attract attention, and finally make profits through rewards or bringing goods.

In the live broadcast of pumps in the Web3 industry, because the platform's control is very weak and it is closer to the money, the anchors can directly issue and speculate coins, which may catalyze the emergence of more abstract and more Behavior without a bottom line.

Typical people will be infected with the poison of pornography and gambling, because behind the poison of pornography and gambling is human nature.

For example, there are already a lot of porn anchors now.

It must be said that the porn industry has a very keen sense of smell. It is often the porn industry that is the fastest to use innovative technologies. For example, after AI became popular, pornographic videos of AI face-changing soon appeared. The celebrities' faces are swapped into pornographic videos, satisfying many people's dirty fantasies.

Pump’s live broadcast function has indeed achieved significant results in attracting attention and increasing user participation. However, the lack of a certain review mechanism will cause the platform to become a hotbed of unhealthy content, which will eventually backfire on the platform itself.

Not all traffic is valuable, some is toxic traffic.

At present, Pump is condoning the proliferation of these harmful contents. Although it can help the platform achieve the effect of becoming popular and out of the circle in the early stage, if it is not restricted later, it may lead to more vicious negative events. Regulation may have to intervene.

Therefore, pump needs to find a balance between attracting user attention and maintaining a healthy and compliant platform ecosystem.

Pump’s team is very product-driven. Pump is very innovative in product mechanism design, meeting the market’s demand for meme currency issuance and hype.

More importantly, Pump’s live broadcast function further promoted its emergence from the circle. Meme currency + live broadcast = explosion of attention economy.

Pump is no longer just a phenomenal product in the Crypto industry, it is constantly becoming popular.

Although meme coins are gambling and pure speculation, they may also comply with the most primitive desires and needs of human nature.

Meme coin is also a unique embodiment of encryption culture and decentralized culture.

The craze of Meme coins actually tells the market: Blockchain technology is so complex and the threshold for Web3 application is so high, so ordinary users should come to this big casino to experience the pleasure of trading and satisfy themselves to get rich quickly. desire.

Meme coin is the most primitive and purest fund pool, and Pump meets the demand that everyone can issue coins and speculate in coins.